Central Asia Metals plc (CAML) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Central Asia Metals plc H1 2026 Results Investor Presentation. [Operator Instructions] Before we begin, I would like to submit the following poll. And I would now like to hand you over to CEO, Gavin Ferrar. Good afternoon.

Thank you. Good afternoon, and welcome to our CAML H1 2026 results. I'm very pleased to announce our results today for the first half of the year, but let's just start with a brief overview of what these results are sort of being underpinned by, which are our 2 operating assets, 1 in Kazakhstan, the Kounrad copper operation, which we own 100%. That has been producing copper cathode since 2012, has a life out to -- or license at least out to 2034. And the Sasa lead-zinc mine in North Macedonia, again, 100% owned since 2017 with a reserve life out to 2034. The Kazakhstan exploration companies, CAML X and CAML XD, again, are conducting exploration for base metals prospects in Kazakhstan. And we have a minority stake in a company called Aberdeen Minerals, which is exploring for copper-nickel mineralization around Arthrath in Scotland. So moving on to the results themselves. Today, we announced a, at 7:00 this morning, really excellent set of results for us, which really reflects a strong operational performance in an environment of good commodity prices. And that has resulted in a revenue figure of $145.5 million, EBITDA of $75.5 million, an EBITDA margin of 52% and free cash flow of $46.8 million. All of these metrics are significantly up on the similar period last year. The cash flow number I mentioned of just shy of $47 million has driven a dividend announcement of 8p, and that 8p represents 40% of free cash flow, which is right in the middle of our dividend range. I mentioned the strong operations underpinning all of that. Kounrad operation, in spite of a very harsh winter, produced around about the same amount of copper. In fact, it was about 1% up as we did in the first half of 2025. And pleasingly, in North Macedonia, we are seeing some improvements there with zinc up 5% versus H1 2025 and lead up 6% versus H1 2025. This was done in a relatively safe manner. We unfortunately did have 2 LTIs. We obviously strive for a 0 harm workplace, and challenge for the rest of the year is to keep that number at 2 and get the number of 1.73, which is the lost time injury frequency rate, back down below our target for the year. Our investment case is evolving. We've got a highly generative -- highly cash-generative business, and we are starting to deliver on the growth aspects of that. And this is something we've been working on for a number of years. Those of you who have been following us will be aware that the exploration started about 2, 3 years ago, and we've also got a proposed acquisition of Cygnus. Now that is a key element to the business moving forward. But as I said, underlying this all is that cash generation driven by our Kounrad and Sasa free cash flow almost 3x higher than it was this time last year. The returns, we've made constant -- consistent shareholder returns, $437 million since our IPO in 2010. That is almost double what we raised from the market in that same period. And the balance sheet of $97.2 million of cash at the end of June, again, gives us that sort of financial strength to move the company forward in terms of both shareholder returns and growth. We talk about capital allocation, and we talk about balancing the capital allocation moving forward. So that is reflected in this 8p dividend announced today, as I said, right in the middle of the policy range. It provides attractive returns to shareholders and also retains capital to finance our growth ambitions. So what we're really doing here is building on strong foundations for the future success of the business. I'd like to hand over to Louise, our CFO, to run you through the financials themselves in a little more detail. Thanks, Louise.

Thanks, Gavin. Yes, if we just start by looking at the market conditions, which are important to understand the strong results that we've delivered this morning, so obviously, most notable in H1 2026 has been really strong commodity prices for the commodities that we produce. And you can see in the little table at the bottom there, we've got 39% higher copper price that we achieved for the first half of 2026 versus the first half of 2025, 26% higher zinc price, the lead price relatively flat at just below by 4%. Important for our revenue and our costs equally, but not our profitability, is the silver price. And so that does impact the look and feel of the P&L, although, as I say, it doesn't affect profitability. But what we've seen is very high silver prices and spikes of up to $115 an ounce. So that's been a feature in higher revenue and also higher costs as well. It's worth me just pointing out that we did put a hedge contract in place 50% of our zinc production. That was at $3,011.5 a tonne. So in the P&L, we'll see we've reported a loss of $1.4 million for that hedge to the 30th of June. Looking on the right-hand column then. Treatment charges has been very positive for us in the first half of this year, totaling $2.7 million of treatment charges in H1 2026. That's down by $2.2 million versus H1 2025. And actually, at the moment, from 1st of April onwards till 1st of April next year, on average, we've actually got negative lead treatment charges, which are obviously very supportive for our revenue line where they are reported. In terms of foreign exchange and inflation, it's the same sort of story at Sasa and Kounrad, where we've got a weaker U.S. dollar versus both of our operating currencies, so U.S. dollar weakened by 70% versus the denar, which is pegged to the euro and by 5% versus the Kazakh tenge. Should also say as well, we put in a hedge contract for 50% of our -- approximately 50% of our expected Sasa on-site operating costs for the year, and we've reported a very small loss on that of $0.1 million. Just a final comment on this slide on inflation, still pretty high in Kazakhstan at 11% but a little bit more reasonable at 4% in North Macedonia. So if we look now in more detail at the income statement, we've got 46% higher revenue to $146 million. As we've just said, that's driven by strong commodity prices, copper, zinc and also the silver and also importantly, higher sales volumes. So it's a 5% higher zinc volume, 4% higher lead volume. And also, while our production at Kounrad was similar year-on-year, we actually had 9% higher sales in H1 2026 versus some stock that had built up in H1 2025. If you look now at cost of sales, that's up by around about $10 million. That $10 million would be more than explained by the increase in the cost of buying those silver purchases that we need to fulfill the royalty agreement with Osisko, that's $8.8 million, and also from an increase in depreciation from $14 million to $15.9 million. That's increased because we sort of mathematically shortened the life of Sasa to 2034 as of the full year period for the end of 2025. So that's brought the depreciation up. So those 2 both add up to $11 million. Within the cost of sales, we were helped quite significantly by a big reduction in MET, which is the revenue royalty we pay in Kazakhstan. And there was a 90% reduction in the rate, which is specific for processing these kind of man-made technogenic deposits, they call them, which is Kounrad is one of those. And so our MET reduced from $5 million in the first half of last year to $0.8 million. Adding back on to that were some cost increases, $2.4 million, from the operations due largely to U.S. dollar weakening against the local currencies, and I'll explain the 2 sites in a little bit more detail. And also finally, within the mix of the cost of sales, we had about $1 million higher concession fee, which is the revenue royalty we pay at Sasa. That's for the higher zinc prices effectively and the increased production that we saw for the first half versus the first half of '25. Admin expenses, they were up by $0.5 million. So -- and of that $0.5 million, one could attribute BD costs, which increased by $0.3 million. So actually, U.K. costs were flat all in all, so there were savings on U.K. admin costs elsewhere. Also within that $0.5 million, looking at the ups and downs, was about $0.1 million up at Kounrad and the rest was up at Sasa largely for the severance pay and the retrenchment program that we undertook. So all that taken into account leads us to report today an EBITDA of just under $76 million, 89% higher than it was in H1 2025. And we've also got really good EBITDAs for both of the operations as well, so 78% increase in EBITDA at Kounrad to $68 million and a 62% increase in EBITDA to $19 million at Sasa as well. Just another couple of bits and pieces of interest on the P&L. One of the large swings there of over 100% is this fair value movement in share-based payments liability. That's really related to the weakening of our share price up until the 30th of June and value in the LTIPs that we have in the business. That typically can swing up and down. And so that's just a factor that's now notable on our P&L. Tax is another one just to point out. That was up significantly by $10.8 million. That's driven by higher profits at Kounrad, which is taxed at 20%. And also, there was an increase in the Kazakh withholding tax rate from 10% to 15%. That's the tax on the money when we bring our dividends back to the U.K. And we brought all our money back to the U.K. in the first half, but we just put half of that through the P&L. We put the second half through the P&L of that money in H2 effectively. And then finally, on this slide, just to point out, we've had effectively an over 300% increase in our earnings per share, and we've also presented an adjusted earnings per share. And all that does is strips out $1.5 million of unrealized hedging losses for -- effectively for H2, which obviously haven't yet materialized. So we stripped those out to show you the underlying profitability of the business. You can look at the 2 -- the costs for the 2 operations in a bit more detail. So at Kounrad, our costs were up period-on-period by about $0.12, and that was on a consistent -- pretty consistent cathode production. The biggest factor, as I've already mentioned here, was the weakening of the Kazakh tenge versus the dollar, and that has the impact of increasing our local tenge-based costs. But interestingly, if we look at the processing cost in absolute terms, increasing from $8.4 million to $9.5 million, over 50% of that is related to the tenge cost. And actually, the remaining increase of 6% is obviously half of what inflation is. So I think all in all, that's quite a good result given the sort of macro environment in Kazakhstan. The biggest number there that stands out a little bit is the payroll. We did give inflation-based pay rises to our workforce in January, and obviously, they're tenge denominated as well. So the payroll does stand out a little bit there. But all in all, taking the cost into account with the strong copper prices, we've delivered an EBITDA margin of 84% for Kounrad in the first half of this year. At Sasa, if we first look at the site-based operating costs there, they're more or less flat, up by 2% or $0.4 million. Again, this is a good result because the weaker U.S. dollar obviously lifts our site-based costs there by 7% effectively. If we look at a couple of the lines here, first processing, processing costs increased by just over $1 million, and that was pretty much all attributable to the tailings disposal cost because we now preferentially put our tailings in the dry stack tailings and also in the paste backfill. So we always have budgeted and knew that our processing costs would be increasing as we make full use of the 2 facilities that we've spent the last few years constructing. The other point really to note is a significant decrease in mining base costs. So that's a $0.7 million decrease. Within that cost is actually an increase of over $0.3 million for fuel related to increased diesel costs, Strait of Hormuz issues, et cetera. And so actually, if we added that in and looked at a similar kind of exchange rate, we would have made savings even larger on the mining area, which is where -- since sort of the middle of last year, where our focus has been on optimization. So all in all, the site-based costs are very positive. And I suppose even more positive is that our C1 cost base in absolute terms has actually decreased period-on-period from $32.1 million down to $30.8 million. And there, we were really helped in terms of the realization cost by those lower treatment charges that I mentioned as well. And we've now got an EBITDA margin of 30%, again, up from the 26% in the first half of last year for Sasa. Just very quick on CapEx. Group CapEx for the first half was $9.5 million. At Sasa, that was just over $8 million, typical levels of underground development, also some underground equipment. And we also had a raise boring project where we spent $1.4 million on in the first half, and that's completed now as of July. At Kounrad, we spent $1.4 million there. And so taking all that into account, we're still reiterating our CapEx guidance of the $14.5 million to $17.5 million for both operations for the full year of 2026. Exploration, it's worth pointing out, we spent $1.6 million on exploration at CAML X and CAML XD. We did maiden drilling programs at 2 of the projects, Yuzhnoe and Otyar, and we did a geophysics program at Shaindy. And we are expecting to do some more drilling. We're waiting for some assay results, but we're expecting to do some more drilling in Kazakhstan this year, so we do still expect to be spending around the $3 million to $3.5 million mark on exploration in Kazakhstan this year as well. Turning now to the balance sheet. Just looking quickly at PPE, the difference there between the $239 million and the $226 million obviously reflects depreciation, deducted plus CapEx, and there's also a little bit of adverse foreign exchange movements as well. The investment in associates, that represents the total of our investment to date in Aberdeen Minerals, which includes $1.2 million of warrants, which we exercised in Q1. We've since agreed to exercise the remaining just under $1.6 million worth in Q3. So that should hopefully be concluded. The paperwork should hopefully be concluded in the next couple of weeks. Pleasingly, on the balance sheet, we can see that we've got a reduction in inventory of $3 million, and that's really due to a lot of pushing that we've been doing at Sasa and a lot of work to purposefully try to reduce the inventory there, which had built up somewhat. And from around about this time last year, our inventory is now down by approaching $5 million. So that's a real positive story in one of the areas that the finance team has been working on at Sasa. I should also point out in the equity and liability section, we have the share premium cancellation that was completed and announced in April, and that really transferred that $206 million from the share premium account to retained earnings, and that really helps us to distribute dividends for the future. So that shows that big swing in the equity and liability section of the balance sheet that we've shown then. And then just finally to highlight that we've ended the period with over $97 million of cash, and we also have $0.4 million of restricted cash, and we only have borrowings of $0.9 million in a small Macedonian overdraft. So we've got a very strong balance sheet. Final slide from me and just looking at the waterfall of our free cash flow in the first half, so cash generated from operations of $71.4 million. The $17.3 million dividend was a 7.5p 2025 final dividend. In terms of income tax and withholding tax, $19.8 million there. That's less cash tax than you see on our income statement. On the income statement, we're reflecting the effective taxes of the period of profits, whereas in cash, we're paying our taxes based on last year's profit. So we plan to catch that up from August to December of this year. But that number does include the full amount of withholding tax of the $10 million that we brought back to the U.K. with our -- that we paid, sorry, to bring our dividends back to the U.K. and that compares to $6 million last year, higher because of the higher commodity prices and also because of the increase from 10% to 15%. CapEx exploration, Aberdeen investment, we've already talked about. Just as a reminder, share buyback of $4.8 million was the last part of the $10 million share buyback that we committed to do at the same time last year when we announced our interims, and we completed that in March. Adding all of that up, that brings us to cash of the $97 million, which excludes the $4 million restricted cash but does include that $0.9 million overdraft facility. If we look at the free cash flow and our adjusted free cash flow, which is what we base our dividend calculations on, we've added back on half of that withholding tax just to split that evenly over the 2 6-month periods of the year. So we've added that $5.1 million back on. And so that gives us an adjusted free cash flow of just under $47 million, and that's an increase of 189% versus H1 2025. So I will hand back to Gavin to run through the operations.

Thanks, Louise. We'll start with Kounrad, which was sort of -- looks like it was steady as she goes with a very similar production of copper cathode to what we have experienced in 2025. But I must commend the team there for producing this copper under extremely harsh winter circumstances. We had a lot of cold weather this year. So really fantastic effort from the people out there. We're on track to meet our full year 2026 guidance of between 12,000 and 13,000 tonnes. And with the copper price being where it is, we will continue to benefit in terms of achieving that guidance from those higher commodity prices that we've been enjoying for the last 7 months or so. We did have one LTI, which I mentioned at the outset. We always try and learn from these things. Fortunately, in this case, it wasn't too serious, but we are -- we always change policies, procedures and the operating procedures in order to mitigate against anything like that happening again. And the last point I'll make here, since we started producing in 2012, Kounrad has now produced over 185,000 tonnes of copper, which is a great achievement for what is quite a unique asset. If we turn to the outlook, for Kounrad, the challenge here is to, as I said, continue taking advantage of these high copper prices and the strong operational performance in the first half. And operational focus going forward is really maximizing the efficiencies of the project. You will have noticed that our guidance has moved downwards from 2025 to 2026 and probably, given the sort of remaining copper in there, trend downwards as well. So we just got to make sure that this asset is as efficient as possible moving forward. We have updated a maiden ore reserve actually for Kounrad that was published in August, and that's in support of the Cygnus transaction, which is both JORC and 43-101 compliant, which has to do with the TSX. And that JORC ore reserve effectively says that there's 407,900 tonnes of contained copper. Now being a unique operation, we're not going to ever extract that a whole lot. And what we do say is that we're going to, on our original plans, extract a further 75,400 tonnes of copper, which will see us out to the end of the license in 2034. But looking at that graph that's in the center of your screens, we can see that the actual recoveries on the western dumps in this case has outperformed our forecast recoveries and it certainly has outperformed on the eastern dumps historically as well. So it's reasonable to assume that, that 75,400 is a minimum amount of copper that we'll be extracting from those dumps after that date. And it does also suggest that there is potential to extend beyond that date should we achieve an extension to that license. Now I just want to mention the solar plant here. I think Louise was talking about some of the cost pressures in Kazakhstan. We are going to see electricity prices going up slightly from $0.06 to $0.07 a kilowatt-hour. So it makes our solar plant ever more valuable and it's already produced 18% of our electricity consumption for the first half of the year. And the second half of the year is generally higher given it's through the summer months there as well. So pleased with that performance. Moving on to Sasa. We're beginning to see some of the benefits of the full review of the business that we conducted in 2025. We've seen ore mined going up by around 8,000 tonnes for the period, which is a good result. And -- but more importantly, we're actually seeing the grades that we're achieving out of that ore higher as well, which has led to that 5% extra zinc and 6% extra lead versus the corresponding period in 2025. What that's telling us is that the miners and a lot of these initiatives we're putting in place are sort of coming into effect. The miners are mining more efficiently. We are getting more kind of bang for our buck almost literally out of the explosions that we do underground and less overbreak, which means less dilution. And therefore, that's why you see in those grade lines on the table on the right-hand side, those are moving upwards to what we would more reasonably expect versus what we achieved in 2025. Again, we put our mineral resource and ore reserve statements out in August this year, again, in support of the Cygnus transaction in both JORC and 43-101. There's no change actually from the resources and reserves that we published in March this year for Sasa. The improvement program is continuing. We're going to emphasize mining and cost control moving forward. If we go to the next slide, we can talk in a little bit more detail about that. So we continue to strive for this improvement at Sasa basis. And what we've done so far has really been around productivity, staffing levels and costs. I think we reported in March that we lost around 11% of our colleagues at Sasa under a sort of staff sort of reduction program there. They've agreed to leave the business. And we're going to continue with a number of these initiatives as we move forward. But in H1, we really concentrated on the mining, as I said, increased in advance per blast there. We've gone from 2.1 meter average to 2.8 meter average in the lateral development, which is a really good result. Grade control, that's around understanding the geology better and planning and allowing our miners to plan their activities better without the surprises that were confronting us last year. And then importantly, we've gone through part of the cost control and inventory reduction program, and that's on the balance sheet, is the $3 million reduction in inventory there as well. So moving forward, we're going to continue with these initiatives, mainly around executing on the life of mine plan that we published in March this year as well and also making sure we hit budget. We've got some improvements we're chasing on maintenance, mainly around data capture and planning there as well and again, bolstering the team to make sure that we've got sufficient planning, production and drill and blast expertise just to assist with the execution of the underground mining and ensure that it continues the upward trend that we've seen here. So overall, we're very pleased that we're starting to see some of the results of the reviews that we did in 2025 at Sasa but still a long way to go. So we're certainly not taking our focus off of that just yet. Sustainability remains a core part of our business. The license to operate is really crucial to any mining company. And I'll just run you through a few of the highlights from the period rather than going through the slide in much detail. 2025, on the health and safety side, we've conducted a full review of the health and safety culture within the business and started implementing that into 2026. That was workshopped amongst the site. So a lot of input from site there and some consulting there as well. That will hopefully continue the good safety trend that we hope to continue with. Community investment continues mainly in education infrastructure. And importantly, Sasa Foundation's business acceleration program that we've been talking about for a while is now up and running, and we've got 4 businesses that we're backing in the local region there as well. The environment, obviously is crucial that we care for that. We've completed a biodiversity management and climate resilience review across both operations. We're updating our closure plans now that we've completed all the capital projects at Sasa, and they're also about 5 years out of date. And then importantly, in terms of tailings at Sasa, we've managed to put 77% of our tailings either back underground onto the dry stack tailings land form, which preserves TSF 4, the wet tailings facility through to 2034 and beyond. So in terms of outlook and capital allocation, we've made good advances across the entire exploration portfolio. In Kazakhstan, we have 2 companies there, CAML XD and CAML X, both of which are targeting high-grade base metals prospects in the region. CAML XD is 100% owned, and very importantly, we've just signed an option agreement -- or in the first half signed an option agreement over a very attractive exploration project, which is really an elephant country in Kazakhstan, which is host to a lot of these sediment-hosted copper mines that has made Kazakhstan a famous copper producer really. So option is for 3 years with extension for 1 year. It's also adjacent to one of our current projects that we have in CAML X. And the field work has started. We've delineated drill targets, and we've got a drilling program of 4,600 meters set up that will start in the second half of this year and go over into 2027, so very excited about that prospect. CAML X, slightly longer journey there, but we've got to the point in the last 6 months that we've actually drilled 2 of our prospects. It took a couple of years to get to that point, which is actually pretty quick for greenfield exploration. We've drilled 4,300 meters across 15 holes at Otyar and Yuzhnoe. At Otyar, we've identified polymetallic mineralization, which looks like it's got visible lead and zinc mineralization there. And at Yuzhnoe, we've confirmed that there's a copper-molybdenum mineralization occurring over quite a long strike length of 1.2 kilometers. So that's pretty exciting as well. Unfortunately, we sit here without the assay results, which is really the proof of the pudding. We're all waiting for those to come in during quarter 3 this year. So keep an eye out for the news releases on that. So if they are successful, then we'll be looking at more drilling at both of those prospects. Last but not least, Shaindy in Kazakhstan, where geophysical surveys that we completed, that data has been interpreted with drill targets being generated and drilling -- we'll decide whether or not to drill those in the second half of this year as well. Aberdeen Minerals is the minority shareholding that we have in the copper-nickel exploration up in Scotland. They completed their Phase 3 drilling program in the first half of 2026. And on the basis of the results there, we've elected to exercise the balance of our warrant instrument. That's GBP 1.15 million. It will take our shareholding up to just shy of 39%, and that will finance Phase 4 of drilling. So best of luck to Fraser and his team up in Scotland with that for the rest of the year. The other key element to our growth is the proposed transaction of Cygnus Metals. We've made a lot of progress since we last spoke, and we announced that in June. There's a rather large document called the scheme booklet that was published by Cygnus on the 13th of August and is accessible via our website as well, which sets out a lot of detail of the Cygnus business and also prospectus level disclosure on CAML as well. And that CAML disclosure has also been published separately into a U.K. circular that came out on the 14th of August. Both of those documents are there to inform shareholders for their votes that will be coming up in the CAML case on the 2nd of September. So please, if you haven't voted, please consider doing so and on the 18th of September for Cygnus shareholders. Those are the 2 main approvals that we require in order to go ahead. And if all does go ahead, the ownership will transfer to CAML on the 5th of October 2026. So what Cygnus will do will add a super asset to CAML's portfolio. It is high-grade copper-gold, adds more copper exposure to CAML in a Tier 1 jurisdiction and provides significant geographical diversification as well and also and importantly, has a lot of exploration potential attached to it, too. We'll be bringing our own underground and operational expertise to bear here, plus also our construction expertise and advancing the project towards its final investment decision as fast as we can. So just to remind you what we've bought there, it's a sequence of copper-gold deposits located in Northern Quebec, which is, as I said, really good jurisdiction, measured and indicated mineral resource of 6.4 million tonnes at really good grades, 2.3% copper, 0.8 gram a tonne gold and 7.6 gram a tonne silver and a similar 8.5 million of inferred mineral resource. There is a PEA that was done in 2022. Cygnus has started another PEA but has basically been focused on drilling, so it can get more and more of the resource into the indicated category so that it satisfies Australian regulations for the publication of a PEA. And CAML will effectively be taking ownership and authorship of that PEA once we secure the project, hopefully, in October. Because it's located quite near a town of Chibougamau, there's a lot of existing infrastructure in place. There's roads. There's power. There's water. And also importantly, it's a brownfield site for that little photograph on the top right showing you what used to be a 900,000 tonne per annum copper processing facility, which will require quite a lot of refurbishment, but it does accelerate the permitting timetable because we've already got a brownfield site there. And adjacent to that, you can't see it in the photograph, is actually a tailings facility, which is actually a live tailings facility right now as well. So it will also assist us with our permitting efforts for Chibougamau. We talk about the sort of resource upside or the exploration upside here now. Now the region has got a really rich mining legacy behind it, and it's produced over 1 million tonnes of copper and 3.5 million ounces of gold historically. So we are, again, in elephant country here. If you look at that little schematic map, that little long section map there, you can see the 5 primary deposits that we're talking about acquiring here, plus the copper and mill in the middle of that. And then there's an 18-kilometer strike length trend that Cygnus has secured all of their land package along that, which provides us with a lot of drill targets. So all of those little red arrows, you can see is where we've got the known deposits open at depth, also along strike plus also targets in between these deposits that we'll be testing with the drill rig over the next few years and increasing the size of that resource inventory there as well. So a very transformative transaction for CAML there but also importantly for Cygnus shareholders, it would be putting that asset into a company that has the wherewithal to develop the asset and then ultimately construct it without dipping into the market again and diluting them even further. So we think a really good win-win situation for shareholders all around there. So finally, our outlook for 2026 is to take advantage of these continued high prices for copper and zinc, and that means keeping the assets on track to achieve our full year guidance for both copper, lead -- for each of copper, lead and zinc. Key are the shareholder votes I spoke about on the 2nd of September and the 18th of September, with the transaction expected to be complete in October 2026 if those votes go the right way. We do have a TSX listing underway. That's why we've updated the reporting of the resources and reserves of both assets to 43-101 standards. And assay results, really excited about those coming in from Kazakhstan over the next few weeks. So keep an eye out for those. In terms of capital allocation, we're very pleased with that half 1 dividend of 8p. It's 40% of adjusted free cash flow, continuing with the dividend repayments to our shareholders as part of the capital allocation that we look to continue with going forward as well. We've got cash in the bank of $97.2 million. CapEx, we completed all of the capital projects at Sasa. So we're really looking at sustaining CapEx only moving forward on both Sasa and Kounrad and we, as Louise said, sticking with our guidance there for 2026 as well. And the cash resources that we have now and we'll continue to build are sufficient to fund our exploration in Kazakhstan, pay for the Aberdeen warrants, advance the Chibougamau project, plus also continue with good shareholder returns. So we think this set of results hopefully sets us up for the next 6 months and going forward. So I'll stop there and invite questions from all of you in the room. Thank. So Richard, do you want to read the questions out and we'll -- as they...

No. Okay. Well, we've got some questions in. First question from [ Jeffrey H ]. When is the overpaid tax actually going to be received? The results narrative keeps repeating it will be recovered by dialogue or offset, but the amount owed is increasing.

Yes, I can answer that one, [ Jeffrey ]. No, it's a very good question. I think sort of part 1 of that answer is, I think, the balance sheet date was a little bit unlucky because we have since received around $2 million of that. It's actually VAT that were owned back. And yes, we've received around about $2 million since that balance sheet date. But your point is well made. And while the narrative does stay the same, we have reenergized our efforts into getting that VAT back. We actually commissioned some work, a study as to the best ways to approach doing that in the first half of this year, remains the best way being to try to make sales locally. So what we've been doing is we've gone out to various potential customers to sense their appetite. And then we're doing some analysis as to how much material we could and should sell per quarter in order to receive a reasonable amount back while still exporting the majority. And obviously, there may be a trade-off between getting the VAT back and actually maybe achieving a slightly lower price in country. So there's a lot of analysis that we're doing. And obviously, I can't give you results of now but just to give you comfort that the efforts have been reinforced to try to recover some of that VAT.

All right. Next question is from [ Mark A ]. And [ Mark ] asks what pressures will bear on the business as both Kounrad and Sasa are due to expire in 2034.

That's a good question, [ Mark ]. I think, look, a lot of the growth that we're talking about here is effectively being put in place now to ultimately replace what are finite resources at both Kounrad and Sasa. So I think it's just natural for a mining company to do that. All of these resources that we exploit from the ground are finite after all, so we need to work hard in order to replace those. However, what I would say is that the 2034 date, whilst that's where the reserves at Sasa take us to and that's where the license at Kounrad takes us to, we are working hard at Sasa to drill out additional resources, and we're trying to see whether we can bring that into the mining inventory as well by converting it into reserves. And that will take a couple of years. Plus also at Kounrad, as I said earlier, with that outperformance, there will come a point where we'll be making an application to the state to extend that mining license out beyond 2034. But I think in terms of the horizon from hereon in, we can certainly -- if assuming the Chibougamau or the Cygnus asset -- sorry, the Cygnus transaction, the Chibougamau asset get brought to book, over the next few years, we'll be replacing a lot of the production with that asset, plus also the exploration upside from the Canadian assets and also in Kazakhstan, we would look to replace any production that we lose from either Kounrad or Sasa with those.

All right. Thank you. Next question also probably for Gavin. [ Ben G ] asks if current commodity prices and operational performance continue, should we expect continued higher payouts.

Well, I think the payout today is, like I said, right in the middle of the dividend policy range. And that range has been sort of devised in order to give us the flexibility to allocate capital appropriately. So if we see an opportunity to invest money that will enhance our shareholder value via capital growth, for example, investing in a study at Chibougamau and investing in CapEx there, then we'll prioritize that if we think it's going to get you more than a dividend would. But what we wouldn't necessarily do is move outside of the policy into higher payouts. We had that scenario develop over a few years up until, I guess, probably March last year. And the conscious decision was made by the Board to bring the policy -- bring the dividend payout back in line with the policy so that we had that flexibility to allocate capital to our shareholders and then to future investments in the business.